Home News Everything You Need To Know About Cibil Score

Everything You Need To Know About Cibil Score

Today people are relying on loans for many important aspects of their lives. Banks provide many loans like housing, medical and educational loans. The loan application of the applicant relies on their CIBIL score. Based on this score, the application can be either accepted or rejected. Many surveys and studies state that the rejection list of loans is nearly 70 percent due to a low CIBIL score. On the other hand, a good CIBIL score makes a person eligible for any loan. 


What is a CIBIL score?

CIBIL is Credit Information Bureau India Limited. It calculates the scores of a person’s transactions, savings, and credits. This calculation depends on many factors which mutually form a three-digit number. This numeric value is the CIBIL Score which makes a person eligible for a loan. 


This digit also impacts the accounts information about the credit cards, past loan accounts, and total outstanding principal amount. In general format, the healthy CIBIL score ranges on the higher side of 500. In normal conditions, the free CIBIL score of any individual lies from 300 to 900, which can be easily calculated on any internet platform. However, in full approval of loans, an individual needs a CIBIL score of more than 700. 


How to calculate CIBIL score?

 Many factors affect the CIBIL score calculation. These factors depend upon the accounting nature and loan account of the individual. Here is the explanation about the key factors which affect the CIBIL score:


  • Transaction history: The transaction history includes the information regarding your payment towards the loan amount. Delayed payment and defaulting the EMI amount add negative points to the CIBIL score.
  • Credit mixture: This category usually adds a positive point in the CIBIL score of an individual, which can be calculated and checked. The complete balancing between the secure and unsecured loan amount will boost the CIBIL score.
  • Various inquiries: Too many inquiries from individuals may indicate their pressure and burden from the loan amount. This situation may also indicate the inability to pay the loan, negatively impacting the CIBIL score.
  • Utility in high credit: The high credit score utility can resemble the increase in the debt ratio on the individual. It lowers the CIBIL score because of the high debt burden on the individual.


Importance of CIBIL score:

The CIBIL score is a highly important factor in the present time. It reflects the authenticity of the loan borrower and their ability to repay the loan in the future. It is why CIBIL score has a direct impact on loan eligibility. It provides the loan procedure transparency and helps the loan provider with authentic


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